Sustainable Packaging Design - A Business Case Study

S t i n a T a n g

Master of Science Thesis Stockholm /2014/

Stina Tang

Master of Science Thesis STOCKHOLM /2014/

Sustainable Packaging Design - A Business Case Study

PRESENTED AT

INDUSTRIAL ECOLOGY ROYAL INSTITUTE OF TECHNOLOGY

Supervisor: Professor Björn M. Frostell Examiner: Monika Olsson

TRITA-IM-EX 2014:23 Industrial Ecology, Royal Institute of Technology www.ima.kth.se

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Abstract Packaging is a topic under debate and scrutiny in today’s society, due to its obvious environmental detriment – but also the business opportunities – tied to minimizing or even eliminating packaging. Therefore, two major Swedish companies have collaborated with KTH in order to investigate this field by using a pair of reading glasses as an example. The aim of this thesis is to evaluate the applicability of sustainable packaging design practices and theories in a business case study, and also the value generated in the case study. The results were a review of five sustainable packaging design practices and theories in relation to the case study, and the design of a new packaging called ‘Toblerone’. The conclusion was that all five practices and theories were applicable to the business case study in theory, but in practice, two of them were not economically viable. The link between economic performance and environmental performance had a massive impact on setting the ambition level of this type of sustainability research. However, the economic value generated at the end of the case study was a whopping 720% increase in shipping efficiency, while environmental and social values needed further investigations.

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Sammanfattning Förpackningar är ett hett debatterat och granskat ämne i dagens samhälle, på grund av den tydliga miljöpåverkan – men även de affärsmässiga möjligheterna – som är kopplade till minskning, eller till och med eliminering, av förpackningar. Därför har två svenska företag nu samarbetat med KTH för att undersöka detta ämnesområde, genom att använda sig utav ett par läsglasögon som exempel. Syftet med detta examensarbete är att utvärdera tillämpbarheten av metoder och teorier för hållbar förpackningsdesign i en affärsfallstudie, samt värden som har genererats i fallstudien. Resultatet blev en genomgång av fem metoder och teorier för hållbar förpackningsdesign, samt att en ny förpackningsdesign som kallas ’Toblerone’ togs fram. Slutsatsen var att alla fem metoderna och teorierna var tillämpbara i affärsfallstudien i teorin, men två utav dessa var inte ekonomiskt försvarbara i praktiken. Kopplingen mellan ekonomiskt utfall och miljömässigt utfall hade en betydande påverkan på ambitionsnivån för denna typ av hållbarhetsforskning. Däremot var det ekonomiska värdet som till slut genererades i fallstudien en slående effektivisering på 720% av transporter, medan miljömässiga och sociala värden behöver fortsatt utredning.

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Acknowledgements First of all I would like to thank Semcon and Clas Ohlson for making this thesis project possible, overcoming the complex task of collaboration between two large corporate entities. This entails my Semcon supervisor Pelle Östlund and my Clas Ohlson supervisor Björn Ograhn. I would also like to thank my KTH supervisor Björn Frostell for sincere support and advice throughout the thesis, notwithstanding the challenge of sometimes being in different countries and in different time zones. I would also like to thank the team at Semcon that has contributed to the content in this thesis, especially Ida Andersson who has done some extraordinary work on the graphical content, and Jacob Södergren who has given much advice to the content throughout the thesis. Clearly this project and thesis was no one man’s work, but a collaboration of many and an idea cracking machine operated by equally many. So finally, I would also like to thank the visionary Johannes Holmberg who initiated this collaboration and gave me the opportunity to step through the door.

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List of Abbreviations AF&BPI Australian Food & Beverage Packaging Industry CO2-eq CO2-equivalent, a reference to global warming measured in equivalent

amount or concentration of carbon dioxide CSO Corporate Sustainability Officer CSR Corporate Social Responsibility DC Distribution Center EEA European Environment Agency EMS Environmental Management System ESN Engineering Services Nordic EUROPEN European Organization of Packaging and the Environment EVR Eco-cost/Value Ratio GHG Green House Gases ICSID International Council of Societies of Industrial Design ISO International Standard Organization KPI Key Performance Index KTH Kungliga Tekniska Högskolan (or Royal Institute of Technology) LCA Life Cycle Assessment PP Primary Package SP Secondary Package SPC Sustainable Packaging Coalition SPA Sustainable Packaging Alliance TP Tertiary Package

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List of Figures Figure 1 Packaged product life-cycle ............................................................................ 1 Figure 2 The organization chart of Stockholm Product Development .......................... 4 Figure 3 The organization chart of the purchasing division at Clas Ohlson .................. 5 Figure 4 The reading glasses without packaging ........................................................... 6 Figure 5 Reading glasses displayed in a Clas Ohlson store in Sweden ......................... 6 Figure 6 The foreground and background of the study.................................................. 9 Figure 7 The original primary packaging, and reading glasses ................................... 10 Figure 8 Four major strands of observation studies ..................................................... 13 Figure 9 Environmental performance spider diagram for a case study ....................... 17 Figure 10 The EVR model of packaging design and retail price ................................. 18 Figure 11 Sustainable Packaging Framework by SPA ................................................ 19 Figure 12 Three frame of references - Fixed, Flexible and Versatile .......................... 20 Figure 13 Industrial Design's approach to a business case in general steps ................ 21 Figure 14 The interaction between the client and Industrial Design ........................... 22 Figure 15 Mechanical Design's approach to a business case in general steps ............. 23 Figure 16 Sustainability aspects applied to the business case ..................................... 24 Figure 17 Sustainability aspects added to the interaction between the client and

Industrial Design ................................................................................................... 24 Figure 18 The ‘Toblerone’ packaging, as one of the concepts generated ................... 27 Figure 19 The original packaging for the reading glasses, compared to the new

Toblerone packaging design concept .................................................................... 28 Figure 20 Break-even at 20 Euro pallets, or 57 600 items........................................... 30 Figure 21 Sustainability Index for Semcon and Clas Ohlson ...................................... 32 Figure 22 The Optimist ................................................................................................ 34 Figure 23 The Sustainable Design Procedure Hierarchy ............................................. 38

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List of Tables Table 1 A summary of the interviewees' answers regarding a design brief................. 25 Table 2 Ranking of the different concepts ................................................................... 27 Table 3 Measurements for the original and the Toblerone packaging solution ........... 29 Table 4 Estimated costs for Toblerone ........................................................................ 29 Table 5 Shipping costs comparison per Euro pallet..................................................... 29

Table of Content 1. Introduction ............................................................................................................... 1 1.1 Background ........................................................................................................................... 1

1.1.1 Sustainable Development, Industrial Ecology and Design for X .................................... 2 1.1.2 Industrial Design and Packaging Design ....................................................................... 2

1.2 The Business Case ................................................................................................................ 4 1.2.1 Semcon ............................................................................................................................ 4 1.2.2 Clas Ohlson ..................................................................................................................... 4 1.2.3 The Reading Glasses ....................................................................................................... 5

2. Aims and Objectives ................................................................................................. 8 3. Delimitations .............................................................................................................. 9 4. Methodology ............................................................................................................ 11 4.1 Case Study Methodology .................................................................................................... 11 4.2 Advantages, Disadvantages and Risks ............................................................................... 12 4.3 Methods .............................................................................................................................. 12

4.3.1 Participant Observation ................................................................................................ 12 4.3.2 Semi-structured Interviews............................................................................................ 14 4.3.3 Cross-functional Workshops ......................................................................................... 14 4.3.4 Literature Review and Qualitative Analysis.................................................................. 15

5. Results ...................................................................................................................... 16 5.1 A Literature Study of Sustainable Packaging Design ......................................................... 16

5.1.1 The Holistic Approach .................................................................................................. 16 5.1.2 Eco-cost/Value Ratio ..................................................................................................... 17 5.1.3 Sustainable Packaging Frameworks ............................................................................. 18 5.1.4 Social Aspects ............................................................................................................... 19 5.1.5 Frame of Reference ....................................................................................................... 19

5.2 A Business Case Study of Sustainable Packaging Design ................................................. 21 5.2.1 A Sustainable Design Procedure .................................................................................. 23 5.2.2 Economic Aspects of the Business Case Study .............................................................. 28

6. Discussion ................................................................................................................. 31 6.1 Applicability of Sustainable Packaging Design Practices .................................................. 26 6.2 Economic Aspects and Value Added ................................................................................. 34

7. Conclusions .............................................................................................................. 37 8. Further Studies ........................................................................................................ 38 9. Bibliography ............................................................................................................ 40

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1. Introduction 1.1 Background The packaging of food and consumer products is a highly debated topic today, because of the environmental issues associated with it. According to the EEA, or European Environment Agency (2012), in high-income countries such as the EU15, packaging waste has been steadily increasing since 1998 with few exceptions. In combination with the increased awareness of global climate change and environmental degradation of today’s consumers, a successful and contemporary packaging design is a sustainable packaging design. The packaged product life-cycle is depicted in Figure 1, in order to illustrate how consumer products and their packaging are generated through raw material, production, distribution, retailing, consumption and finally disposal or recycling.

Figure 1 Packaged product life-cycle

Source EUROPEN, 2014 What is sustainable packaging design? And if it is such a hot topic for society today, why does not every company have a sustainable packaging design strategy in place? One of the reasons why companies have not adopted sustainable packaging strategies yet could be that it is a relatively new research area, and the knowledge and practices have not yet filtered down to the big mass of enterprises. Another reason, correlated to the first, could be that many companies do work with packaging in some fashion

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today, but rather than working from a holistic and cross-functional perspective as the approach in sustainability practices, they might instead focus only on material minimization or converting to biodegradable packaging material. This thesis is based on a project applied to sustainable packaging design in a business case between a retailer and a product design consultant company in Sweden. The thesis itself was conducted within the Sustainable Technology program at the Royal Institute of Technology (KTH) in Sweden. The main focus is sustainable packaging design – however, sustainable packaging design is a cross-disciplinary topic that originates from other disciplines. Some of these are given a brief introduction below. 1.1.1 Sustainable Development, Industrial Ecology and Design for X Sustainable development, or commonly referred to simply as ‘sustainability’ in technical contexts, is a complicated concept and can be defined in multiple ways. An example is: ‘Sustainability is the possibility that human and other forms of life will flourish on the planet forever.’, Ehrenfeld (2007) cited in Graedel & Allenby (2010, p. 37). Another example is ‘[Sustainability is] A development path that can be maintained indefinitely because it is socially desirable, economically viable, and ecologically sustainable.’, The International Institute of Environment and Development (n.d.) cited in Graedel & Allenby (2010, p. 37). Graedel & Allenby further elaborate the concept of sustainability into ‘sustainable transition’, and point out that in the short term, everything can be sustained, while in the long term nothing can – why choosing a time scale is important and most operational planning should fall into 25-50 years in order to be realistic. Because sustainability is such a broad concept – incorporating both the ecological domain and all of the anthropological domains – this thesis focuses on Industrial Ecology, which is a branch within sustainability. Industrial Ecology is defined by Graedel & Allenby as ‘the means by which humanity can deliberately approach and maintain sustainability, given continued economic, cultural, and technological evolution. The concept requires that an industrial system be viewed not in isolation from its surrounding systems, but in concert with them’ (2010, p. 54). In other words, it is as the name suggests – a fusion between industry and ecology, focusing on systems thinking. Furthermore, Graedel & Allenby discuss contexts for product design and product development by addressing the concept ‘Design for X’ – in this case, ‘Design for Environment and Sustainability’ to be more exact. Design for X concepts have been in the loop of engineering disciplines for quite some time, where X may be any number of design attributes, such as Assembly, Compliance, Disassembly, Manufacturing etc.

1.1.2 Industrial Design and Packaging Design The ICSID, or International Council of Societies of Industrial Design, defines design to be ‘a creative activity whose aim is to establish the multi-faceted qualities of objects, processes, services and their systems in whole life cycles. Therefore, design is the central factor of innovative humanization of technologies and the crucial factor of cultural and economic exchange’ (ICSID, n.d.). Packaging design can be defined as ‘the connection of form, structure, materials, color, imagery, typography, and regulatory information with ancillary design elements

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to make a product suitable for marketing. Its primary objective is to create a vehicle that serves to contain, protect, transport, dispense, store, identify and distinguish a product in the marketplace’ (Rosner Klimchuk & Krasovec, 2010).

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1.2 The Business Case The project that this thesis is based on was a business case study that involved a retailer and a product design consultant company in Sweden. Below is a brief description of the two companies, and the business case itself.

1.2.1 Semcon

Semcon is an international engineering consultant company that provides product design and product development services, with its head office in Gothenburg, Sweden. There are several legal entities within the Semcon group. The group employs approximately 3 000 people across nine countries, and the largest business entity within the group is Semcon Engineering Services Nordic, or Semcon ESN for short (Semcon, 2014a). In 2014 a platform called Semcon’s Approach to Sustainability was launched. The sustainability strategy of Semcon would include environmental aspects and social aspects into their business strategy, which originally comprised Employees, Business and Customers. At the Stockholm office of Semcon, there has been an expressed interest in investigating sustainable product development and design, since those are Semcon’s core service offerings. Stockholm Product Development is a department of Semcon ESN East, see Figure 2, and consists of four teams. Collaboration between the teams exists, but is limited due to the applied business model, where the main income is generated from having a consultant on site at the client’s location – usually as a technical specialist. Any possible projects that could be accomplished in-house would generally depend on which consultants are between client projects.

Figure 2 The organization chart of Stockholm Product Development

Source Semcon, 2014b

1.2.2 Clas Ohlson Clas Ohlson is a major Swedish retail and distribution company with over 180 stores currently in Sweden, Norway, Finland and the U.K, plus an additional store on its way in Dubai when this business case was conducted. Clas Ohlson started their business as early as in 1918 and has 4 300 employees in five countries. Their main business is to source tools and household products from their suppliers in China, which are sold in

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the Clas Ohlson stores. There are roughly 15 000 products in their range, plus additional spare parts. The business does not have their own manufacturing, but relies on 600 different suppliers in 30 countries (Clas Ohlson, 2014a). In 2005 the company was criticized for its lack of commitment to their suppliers’ work conditions and work ethics, especially in China (Swedwatch, 2005), and Clas Ohlson has been working with its CSR, or Corporate Social Responsibility, program since then (Swedwatch is an independent, non-profit organization that surveys Swedish business relations in developing countries). They have been working hard on following up the recommendations of the last report and started conducting factory inspections in 2007, and even started to audit their suppliers’ suppliers (Swedwatch, 2012). In 2008, the retailer opened up a purchasing office with a CSR department in Shanghai, and consecutively another office in Shenzhen in 2010 (Clas Ohlson, 2014b). Clas Ohlson has continuously developed its sustainability program, and even appointed a Head of Sustainability to further engage the corporation in sustainability work (Clas Ohlson, 2014c). The Packaging and Design subdivision of Clas Ohlson is within the Purchasing division of Clas Ohlson, see Figure 3 and is overall responsible for the packaging and the packaging design of Clas Ohlson’s own brands, i.e. it is a cross-functional subdivision operating across all Category subdivisions depicted below.

Figure 3 The organization chart of the purchasing division at Clas Ohlson

Source: Clas Ohlson, 2014d

1.2.3 The Reading Glasses The idea behind engaging Clas Ohlson’s Packaging and Design subdivision in a business case study was to apply the design and development expertise of Semcon on a physical product in a client-supplier setting, which would resemble Semcon’s general business practice as much as possible. The product was one of Clas Ohlson’s reading glasses, which is a one of the Category Home subdivision’s items.

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Currently, the reading glasses are sold in all of Clas Ohlson’s stores and are usually sold either as singles, or as a three-in-one. The product is a popular item with the retailer’s customers, see Figure 4, but has caused quite some issues in the stores themselves because of its poor packaging. Store customers would break the packaging in order to try the glasses on, and then leave a mess of reading glasses and packaging material while purchasing an un-opened package.

Figure 4 The reading glasses without packaging

Source Ograhn, 2014a The reading glasses are imported from a supplier in China, who also manufactures other items for Clas Ohlson and is considered a major supplier to the retailer. Figure 5 shows reading glasses displayed in store, of which the ones in the upper right corner are the items posed in the business case. Ten singles fit into a secondary packaging, and another ten of those fit into a tertiary packaging, which is then placed directly in a shipping container or stacked on a Euro pallet before shipping to Clas Ohlson’s DC (distribution center) in Insjön.

Figure 5 Reading glasses displayed in a Clas Ohlson store in Sweden

Source Semcon, 2014c At Semcon, there are no specific teams devoted to packaging design; however, there are quite a few employees with packaging development experience within the corporation. The experience and skills are very broad and range from integrated product and packaging design experience, to packaging manufacturing experience, to graphical design for packaging. As for sustainability skills, the corporation has only recently started bringing in sustainability skills to the organization, and there are few people with knowledge in design for recycling and sustainable product realization.

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For this business case specifically, the research of designing the reading glasses and its packaging was mainly focused on the Industrial Design team at Stockholm Product Development of Semcon, and the Packaging and Design department of Clas Ohlson. However, other stakeholders were also involved in different steps of the design process. Because of this broad experience with both product development and packaging design, the business case of the reading glasses will challenge the existing practice of sustainable packaging design, and illustrate the applicability and the issues when putting those into practice in an actual business context. It will further on show the value of such initiatives to the clientele base of the firm.

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2. Aims and Objectives The aim of this thesis is to evaluate the applicability of sustainable packaging design practices and theories in a business case study, and also the value generated in the case study. The objectives are to:

- Identify and describe sustainable packaging design through a literature study - Exemplify how sustainable packaging design could be applied in a business

case study, with reasonable financial limitations - Calculate potential profitability if applying the results of the business case

study - Discuss environmental and social values generated by the business case study

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3. Delimitations This thesis will mainly focus on economic sustainability. However, it will also take into account the environmental and social aspects of sustainability and packaging design. The environmental aspects of sustainable packaging design are mainly to minimize volume and thus environmental pollution from shipping, rather than e.g. materials. The social aspects are mainly what is covered in the literature study. The design procedures that are described and analyzed in the thesis are the methods used at the Industrial Design team of Semcon. Mechanical Design collaborates with Industrial Design, and is a part of the background of this study, while Embedded Design is not included at all. For a better picture of the foreground and background of this study, see Figure 6, where the foreground of the study is shown in a solid line, and the background is shown in a dotted line.

Figure 6 The foreground and background of the study

The packaging subjected to the business case study is the primary packaging of the reading glasses, see Figure 7, however, the product itself, the reading glasses, were sometimes also included in the discussions, but not in the project itself.

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Figure 7 The original primary packaging, and reading glasses

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4. Methodology 4.1 Case Study Methodology A case study methodology has been chosen for this thesis because it allows an in-depth understanding about the system studied. ‘A case study is all about in-debt; it requires you to dig, and to dig deep. You need to delve into detail, dig into context, and really get a handle on the rich experiences of the individual, event, community group, or organization you want to explore. The goal is to get underneath what is generally possible in, for example, large-scale survey research.’ (O’Leary, 2010, p. 173-174). According to Johansson (2003, p. 31), a case study is “…expected to capture the complexity of a single case, and the methodology which enables this has developed within the social sciences.” The author also points out that the case should be investigated in its natural context with a multitude of methods, and should be contemporary. Johansson points out that there are two differing branches of case studies – one that emphasize more on the methodology that constitutes case studies (Yin, 1994 cited in Johansson, 2003, p. 34), the other emphasizing the interest of the individual case and not the methods of inquiry used (Stake, 1998 cited in Johansson, 2003, p. 34). Woodside, 2010, terms the case study methodology as case study research, but supports the other authors when defining the essence of this type of research methodology: ‘The defining feature of CSR [Case Study Research] lies in the supreme importance placed by the researcher on acquiring data resulting in describing, understanding, predicting, and/or controlling the individual case.’ (Woodside, 2010, p. 2). A case study methodology uses several methods to generate knowledge. Triangulation is the essence of case study methodology and an important way to ensure validity in a case study (Johansson, 2003). What is meant by triangulation, according to Woodside is to “…use multiple research methods across multiple time periods.” (2010, p. 6). The author mentions three different common methods, which are:

1. Direct observation by the researcher within the environments of the case 2. Probing by asking case participants for explanations and interpretations of

“operational data” 3. Analyses of written documents and natural sites occurring in case

environments

(Woodside, 2010, p. 6) Denzin (1978 cited in Johansson, 2003, p. 35) adds data sources, theories and investigators to the list of possible sources of triangulation. However, an argument against case study methodology is often that it is problematic to gain objective and reliable evidence, since the methodology combines qualitative and quantitative studies and is not based on a large number of “random” studies. This

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has been argued otherwise by Flyvbjerg (2006), by Galileo’s rejection of Aristotle’s law of gravity. O’Leary (2010) adds a few other critical arguments against case study methodology, such as that necessary level of access might be difficult to attain, the case in question is under a lot of stress and demand – since it is only one or a few cases under study – and understandably, that the researcher could affect the researched case, and vice versa, which will be elaborated further in chapter 4.2.1 Participant Observation.. In defense of the case study methodology, aforementioned Flyvbjerg (2006) points out that biases in case studies are no more severe than in any other research methodology, which is also supported by O’Leary (2010) – who emphasizes the importance of recognizing and managing the researcher’s own biases and subjectivity – and equalizes case study methodology and its potential biases with other types of research methods. In the case study of this report, the emphasis is put on the case itself, rather than on a specific methodology frame. This is because research of sustainable packaging design is a relatively new topic and not widely investigated; therefore, finding comparable cases in order to extrude an ideal methodology is problematic.

4.2 Advantages, Disadvantages and Risks Because of the in-depth nature of case study methodology, the analyses are based on the researcher’s subjective perception of the situations and contexts. The researcher should of course aim to be as objective as possible while carrying out the research, but biases such as preconceptions of the companies involved in the business case still pose a risk. The conclusions are based on interpretations of the researcher, which should be kept in mind while reading the report. The more in-depth nature of the case-study methodology has both its advantages and disadvantages. As O’Leary (2010) points out, in a case study methodology the researcher needs access to a lot of information in order to be able to gain such in-depth levels as is requested. The advantage here is that the deeper the commitment, the closer to the reality of the research, with minimal filtering in between. Before venturing into the thesis project, the author of this report was employed a full year at the Stockholm Product Development at Semcon, and thus had access to in-depth knowledge of the corporate culture and processes. However, this also meant bringing in biases in the form of preconceptions while conducting the research, which is a disadvantage. Another disadvantage is the difficulties in generating quantifiable data and results through this type of study.

4.3 Methods

4.3.1 Participant Observation Woodside describes in the chapter “Participant Observation Research in Organizational Behavior” that in best practice, the researcher lives in the formal or informal organization, in order to ‘make sense of its environment, frame problems and opportunities, plan and perform actions, evaluate outcomes, reward and punishe its

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members, and celebrate and commiserate sacred, climatic, and/or exceptional events.’ (2010, p. 321). What the author is highlighting is the presence of the researcher; in some cases collecting data unobtrusively (i.e. the participants of the case study are not aware they are being studied). O’Leary describes four major strands of observation studies as a method, and gives example of both participant and non-participant observation, see Figure 8.

Figure 8 Four major strands of observation studies

Source O’Leary, 2010, p. 211 The differences between ‘candid’ and ‘covert’ is that in a case of candid observational fashion, the researcher offers full disclosure of the nature of their study, the role of the observation in their studies, and what results they expect to find. This is also usually an ethics requirement in scientific research. However, an observed person or study group can find it hard to act naturally when knowing they are being studied, which is why the researcher must build trust and make sure that participants are comfortable being a part of the study. In a covert observational fashion, the researcher does not disclose the nature of the study, for example by being going undercover while studying illegal activities. However, it is hard to defend the ethical aspect of such research since they breach the core ethical principle of informed consent of the participants. According to the author, a researcher must also take into consideration whether to use a structured, semi-structured or unstructured approach. A structured approach may involve checklists or observation schedules, and the researcher will attempt to be removed and impersonal in order to minimize personal influence. In a semi-structured approach, the aforementioned tools can still be used, but the observations may deviate

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from the planned form in order to take in other types of observations. In an unstructured approach, the researcher could record all observations in order to later try to find a pattern, or analyze the initial observations in order to focus the subsequent observations. In this project, both types of participant observations were used. The covert fashion was precedent to the thesis project, because the researcher in question was employed at Semcon for one year before the project begun. Semi-structured and unstructured observations were made and taken into consideration in this report.

4.3.2 Semi-structured Interviews According to O’Leary, interviewing is ‘A method of data collection that involves researchers seeking open-ended answers related to a number of questions, topic areas, or themes.’ (2010, p. 194). The author divides the interview technique into ‘formal’ or ‘informal’, ‘structured’, ‘semi-structured’ or ‘unstructured’, ‘one on one’, ‘multiple’ or ‘focus group’. Formal interviews takes place where the interviewer is trying to remove himself or herself from the situation, and maintaining an objective stance. Usually, this is conducted in an office or a formal arena of some sort. An informal one, however, can take place in a bar, restaurant or other setting that helps the participant to relax and chatting comfortably. As for structured interviews, the questions are pre-established, and in a predetermined order, while for semi-structured interviews, the interviewer can start with a pre-determined interview plan, but will be flexible enough to allow deviations in order to pursue other interesting targets. As for unstructured interviews, there are no pre-determined questions and the goal of the interview is to draw out rich and informative conversations. As for the participating type of interviews, one-on-one is a standard method, while multiple means interviewing several people at the same time. A focus group is a type of group interview, where there is more of a question rather than a strict question/answer process. For this case study, seven semi-structured interviews were conducted, and ranged from 15 to 45 minutes each. They were all one-on-one, and of an informal character. The interview questions followed a guideline supplied by The Royal Institute of Technology (2013):

• Never two questions in one • No hypothetical questions • No overlapping questions (depending on the situation) • Avoid questions that can be answered with yes/no • Avoid jargon • Avoid sensitive issues (without a good reason) • No leading questions • Do not pose questions that are not relevant to the issue at hand • No questions that reveals the values of the interviewer

4.3.3 Cross-functional Workshops

A cross-functional workshop was conducted, where the aim was to involve as many stakeholders at possible in the development process (Ranhagen & Frostell, 2014). Ranhagen & Frostell carried out two cross-functional workshops for the pre-study of Kretsloppsmodell 2.0 (Eco-Cycle Model 2.0) at the Royal Seaport (Norra

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Djurgårdsstaden) in Stockholm. The Royal Seaport is a new sustainable residence and industrial area currently under development in the north of Stockholm, and the workshop was an eco-loop/industrial metabolism visualization. Ranhagen & Frostell used the backcasting methodology as a framework for the two workshops conducted. Unfortunately, there was not enough time to do a backcasting during the thesis workshop, but instead the stakeholders were given a task to formulate eight criteria for the packaging solution, and agree on a ranking order. For more details, view chapter 5.2.2 Reading Glasses: Sustainable Design.

4.3.4 Literature Review and Qualitative Analysis A literature review has been conducted during the thesis period, and has mainly covered sustainable packaging, packaging design and sustainability tools and methods (generally related to design and development when lacking the packaging aspect). The qualitative approach of the analysis of the literature review was carried out according to Eriksson (2013). Eriksson points out that the primary focus of qualitative analysis is to find common dimensions/themes of the data subjected to review. Sometimes the analytical units are relevant for more than one dimension/theme. After the dimensions/themes have been set, the data can be sorted and compared within the dimensions/themes.

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5. Results 5.1 A Literature Study of Sustainable Packaging Design Sustainable packaging design is a relatively narrow research area, and when put under scrutiny, it reveals a limited number of scientific research conducted within the topic However, it is an area of interest for the business sector, which can be illustrated by the substantial work of Walmart, a number one ranking Fortune 500 company (Walmart, 2014), showcasing a number of examples on their webpage such as working with score cards for their suppliers’ packaging solutions. Most research regarding sustainability and design has been conducted to develop or analyze design/sustainability tools or working methods in a product design context, such as Vargas Hernandez, et. al. (2012), Lindahl (2005), Singh (2013), and Laurenti (2013). Other studies have focused on adding design features to a sustainability context or vice versa, such as Graedel & Allenby (2010) adding Design for Environment to an industrial ecology context, Evans & Sherin (2008) adding sustainability to a graphic design context. A handful of researchers have found their ways into the field of sustainability packaging design, and a recap of their research is presented below.

5.1.1 The Holistic Approach Svanes, et al. (2010), put forward an evaluation method of packaging sustainability from a holistic perspective, intended for use in cross-functional teams. From a holistic perspective, the environmental impact of both the product and product packaging must be taken into consideration (see the ‘Packaged product life-cycle in Figure 1). The holistic approach of Svanes, et. al. took into consideration five different evaluation categories, including monitoring the conditions in the distribution chain:

1. Environmental performance of the total packaging/product system 2. Total distribution costs of the packed product, including cost of all materials

and processes along the distribution chain, packing process, storage, transportation and retail costs

3. Preservation of product quality 4. Market acceptance, branding and exposure 5. User friendliness

Sub-categories of each of the five categories were quantified and put into spider diagrams. In Figure 9 the spider diagram for the Environmental performance category is demonstrated.

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Figure 9 Environmental performance spider diagram for a case study

Source Svanes, et al., 2010, p. 168

5.1.2 Eco-cost/Value Ratio Another paper bringing forth an evaluation tool for packaging sustainability is the EVR, or Eco-cost/Value Ratio, by Wever & Vogtländer (2012). The EVR model compares two very similar packaging solutions, e.g. two water bottles, and compares the willingness of the customer to pay for an ‘enhanced’ water bottle with e.g. a sports cap, and a regular water bottle with a screw cap. In other words, it measures whether or not an enhancement or added feature of a packaging solution is generating more economic value than environmental impact, or the other way around. The eco-cost is calculated using an LCA, or Life Cycle Assessment, analysis to evaluate the two packages – the water bottle with the sports cap and the one with the regular screw cap. The difference in environmental impact, in e.g. CO2-eq, gives the Relative eco-cost (see Figure 10 below), while the Relative value is the difference in retail price of the two water bottles. If the ratio between the environmental impact increase (or decrease) and price difference falls within Quadrant 2 in Figure 10, it means that the new packaging design has decreased its eco-cost or eco-burden, while the value has increased. However, sometimes the new packaging solution will appear in Quadrant 3b, where the consumer is willing to pay more, but the Relative eco-cost is higher (or the opposite occurs in Quadrant 1b where the eco-cost has been decreased, but the new packaging solution generates a negative consumer experience and thus results in less sales or lower sales price).

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Figure 10 The EVR model of packaging design and retail price

Source Wever & Vogtländer, 2012, p. 237

What Wever & Vogtländer (2012) indicate is that sometimes the Relative eco-cost is increased, but the Relative value increase is bigger than the eco-cost (Quadrant 3a), or the other way around (Quadrant 1a), which indicates an acceptable increased environmental burden because of increased economic value. However, in Quadrant 1b and 3b, the eco-cost decreased (or increased) to the effect that the sales price has dropped even more (or increased less than the eco-cost), which makes the added feature or enhancement not beneficial in the model.

5.1.3 Sustainable Packaging Frameworks

Organizations working with sustainable packaging – such as SPA (Sustainable Packaging Alliance), SPC (Sustainable Packaging Coalition) and EUROPEN (The European Organization of Packaging and the Environment) – have developed frameworks of requirements (also KPI’s, or Key Performance Index, in the case of SPA), derived from research in these areas. An example is the SPA framework called ‘Principles, Strategies & KPIs for Packaging Sustainability’ below in Figure 11.

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Figure 11 Sustainable Packaging Framework by SPA

Source SPA, 2010 An example of a requirement in the ‘Effective: fit for purpose’ category is to “Eliminate any packaging which is not necessary”, of which the KPI is to have a list of functions regarding each component in the packaging system.

5.1.4 Social Aspects Nordin & Selke (2010) conducted a literature review in order to consolidate the social aspects of sustainable packaging. The authors point out that there are two different interpretations of the social component. One is the CSR aspect throughout the manufacturing, supply chain and distribution. The other is consumer oriented (the interests and perceptions of the consumer), which is a much less researched topic. Since 17% of consumers today are ‘green motivated’ and willing to shift their brand loyalties to ‘green’ companies, their literature review focuses on the consumers’ perception regarding sustainable packaging, their perceptions the packaging’s impact on the environment and the factors that drive consumers’ preferences and purchase decisions (Nordin & Selke, 2010) Nordin & Selke found several common denominators in their analysis. Those were:

1. Increased Environmental Awareness, both for consumers and industrial manufacturers

2. Lack of knowledge of sustainability concepts, e.g. that consumers often mistake sustainable packaging to be recyclable packaging

3. Significant terminology gap, especially confusing because of all the buzz words such as ‘post-consumer material’, ‘renewable’, ‘biodegradable’, etc.

4. Attitude/behavior gap: willingness does not translate to behavior, for example because consumers believe that manufacturers are responsible for sustainable packaging without passing along any additional cost.

5.1.5 Frame of Reference

Avendaño Franco (2013) has in his The Role of Design Practice in Packaging Sustainability in Australia conducted a cross-disciplinary research covering sustainability, packaging design and design practices in organizations. The author has, through a literature study and semi-structured, open-ended interviews, analyzed the

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history of design, defined different characterizations of design, and reflected on the contemporary design practice in organizations within the AF&BPI (Australian Food & Beverage Packaging Industry). The author pinpointed two characteristics of design: Design as a problem-defining activity, and design as a problem-solving activity. From there, a framework called “Frame of Reference” was conceptualized (see Figure 12). The different frames of reference reflected elements and design practices within an organizational context.

Figure 12 Three frames of references - Fixed, Flexible and Versatile

Source: Avendaño Franco, 2013, p. 147

A fixed frame of reference of a designer is when the nature of the role is restricted, and the designer is engaged in solving well-defined problems formulated by others. In a flexible frame of reference, the designer is adaptive and receptive to understand a situation and is aware of their influence in modifying elements of a problem. In a versatile frame of reference the designer is initiatory and creates relationships among variables to define the problem itself.

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5.2 A Business Case Study of Sustainable Packaging Design Several concepts, frameworks and approaches from the literature study were involved in the business case study. Some of the aforementioned SPA framework for sustainable packaging was taken into consideration, when possible. The frames of reference by Avendaño Franco were also used in order to push the involved designers to think of themselves as the problem definers, rather than problem solvers. When a new project lands at the Stockholm Product Development office, it is either a client who has approached Semcon, or one of the sales staff who has generated a lead, and the industrial designers’ team leader or one of the consultants takes over and develops the business case. A general overview of the project development could be something like what is shown in Figure 13 and Figure 14.

Figure 13 Industrial Design's approach to a business case in general steps

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Figure 14 The interaction between the client and Industrial Design

After generating a CAD drawing, the product can be further realized by moving into the Mechanical Design team’s design procedure according to Figure 15 below. The Final Concept step from Figure 14 overlaps with the Principal Construction step in Figure 15.

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Figure 15 Mechanical Design's approach to a business case in general steps

5.2.1 A Sustainable Design Procedure

The main activities added to the design procedure utilized for the business case study can be reviewed in Figure 16 and Figure 17 below.

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Figure 16 Sustainability aspects applied to the business case

Figure 17 Sustainability aspects added to the interaction between the client and Industrial Design

In order to gain product and packaging design expertise knowledge, six industrial designers and mechanical designers, and one graphic designer were interviewed. They

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all had some type of packaging design background or experience. The interviewees provided insight to the type of design brief this business case study would have generated – i.e. a design brief for the reading glasses’ packaging. They were informed of the background of the reading glasses, and also of the intent of the project of applying sustainable packaging design (but not in any detail of what sustainable packaging design entails). Then they were asked to list questions they would have liked to ask the client in order to generate a design brief. The questions generated from the interviews are listed in Table 1.

Table 1 A summary of the interviewees' answers regarding a design brief

Interviewee 1 1. What is the annual volume generated? 2. Should the consumers be able to try the reading glasses at all, or should they

be completely sealed in? 3. Is the packaging supposed to be able to be packed into a secondary

packaging? What type of secondary packaging? 4. Should the packaging look good on a shelf in store, or only be used for

transportation? 5. What kind of requirements of the packaging – e.g. the strength? How much

pressure should it resist? Interviewee 2 1. Who is the typical consumer? 2. Should the packaging be easy to reuse or recycled? 3. What should the product communicate to the consumer? Interviewee 3 1. What type of plastic is the packaging made of? If it is supposed to be

reusable, then how many times? 2. During transportation – how stackable should it be? What is it arriving in?

How much extra wrapping? How is the packaging retrieved? How can you stack 10 of them on top of each other without the product being broken?

3. How is it handled? How is it displayed in the store? Packaging still on it in the store? How lean does the store handling process need to be?

4. Is the product hung up in the store? Maybe it can be exposed on the side, is this set or flexible?

5. How “easy” should it be to open? 6. Is it possible to have a reusable secondary or tertiary packaging only for the

distance between supplier in China and the central distribution center in Insjön? That would save a lot of money and perhaps environmental impact to begin with?

Interviewee 4 1. Why are the reading glasses packaged? 2. How easy should it be to open the packaging? 3. What kind of pressure expectations? 4. Must it be made in plastic? 5. What kind of secondary packaging? 6. Is it important for the client that the reading glasses are sold in a packaging?

Is that a part of the experience, to come home with an exclusive packaging? Interviewee 5 1. What kind of text should be displayed on the packaging? 2. What measurements are there? 3. What kind of font of the text? 4. What kind of coloring? 5. What does the other packaging solutions look like, so they all have similar

design? 6. Pictures that should be on the packaging? 7. How would you prioritize the information? 8. Any recycling symbols? Interviewee 6 1. How large will the glasses be, if the range of reading glasses would be

modified? That is to say, what are the basic measurements the packaging should be able to contain?

2. Should it be modified to a Euro pallet? 3. How is it transported today?

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4. Should the packaging be transparent so you can “try out” the glasses? 5. There is now three different materials in the packaging – are there any

criteria of how many materials to use? 6. Is it really necessary to have more than one component in the packaging?

(The more components, the more expensive.) 7. Any information/text on the packaging? What language(s)? 8. Should the packaging be “broken” when opened? 9. Any weight requirements? 10. Does it need to be in plastic? 11. Can frogs get trapped in the “ring” and die? If you break the packaging,

there will be loose parts falling off and potentially pollute the environment 12. Requirements of temperature? How far it can fall? 13. Should it look cheap? 14. What kind of issues do you experience today? 15. Why not work with a display stand that will make people not wanting to

open the packaging, or a combination? Interviewee 7 1. Is it supposed to look cheap, or expensive? 2. What is the targeted demographic? 3. Are there any material requirements? In the cross-functional workshop, a total of three Semcon stakeholders and four Clas Ohlson stakeholders participated. The Semcon stakeholders represented Sustainability, Industrial Design and Mechanical Design. The Clas Ohlson stakeholders represented the Packaging and Design department, Category Home and the Chemical Coordinator of the corporation. The end result of the workshop was seven criteria put in preferred order, with the first one as the most important one and the last one as the least important criteria:

1. Profitability (General criteria for the product) 2. Protection (during transport, in the store) 3. Efficient logistics 4. Information about the product 5. User friendliness 6. Material 7. Display in store (easy to stack or to hang up for the store clerks)

Concepts (A to F) for the reading glasses and its packaging were then generated by the Industrial Design team, with these aforementioned criteria in mind, and then ranked (see Table 2) according to these criteria (the first criterion regarding profitability was excluded because of lack of access to data). One of the two winning concepts was the ‘Toblerone’ packaging, which is illustrated below in Figure 18.

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Table 2 Ranking of the different concepts Source Semcon, 2014c

Figure 18 The ‘Toblerone’ packaging, as one of the concepts generated Source Semcon, 2014c

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5.2.2 Economic Aspects of the Business Case Study When the reading glasses are shipped today from Shanghai to Gothenburg, they are packed as depicted in the left section of Figure 19 below. This can be compared to the right section, which illustrates how the conceptualized Toblerone could be used as packaging for the reading glasses. All measurements are given in millimeters.

Figure 19 The original packaging for the reading glasses, compared to the new Toblerone packaging design concept

An estimation of packaging volume and increased amount of primary packaging when using the Toblerone packaging will be calculated below, in order to show potential savings in shipping costs. The shipping costs estimations will be exemplified for an estimated tertiary packaging and for a standard Euro pallet. Aforementioned Toblerone is evaluated, and the original packaging is used as a reference case. The Toblerone packaging solution only accounts for 18% of the volume of the original packaging, see Figure 19. The product is assumed to be packaged optimally, and well enough to tolerate equal amount of pressure non-dependent of which side the pressure is applied to. The measurements of the two solutions are shown in Table 3– PP (Primary Packaging), SP (Secondary Packaging) and TP (Tertiary Packaging). The measurements for the original’s PP and SP were given, while the TP was estimated with an additional 50 mm in each dimension as a buffer for packaging material volume. For Toblerone, it is assumed that the TP will be re-dimensioned according to the packaging solution, rather than using the TP measurements from the original’s TP. Buffers are also used here, 50 mm to each dimension in TP, but an adapted buffer for the Euro pallet, see Figure 19. The

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maximum dimensions for the Euro pallet is 800 mm x 1 200 mm (base) and 850 mm (height).

Table 3 Measurements for the original and the Toblerone packaging solution Original Toblerone PP 245 mm x 120 mm x 30 mm (60 mm x 30 mm) /2 x 180 mm SP 255 mm x 130 mm x 330 mm n/a TP (estimated) 560 mm x 700 mm x 380 mm 350 mm x 410 mm x 590 mm Total 100 PP in a TP Total 360 PP in a TP Total 400 PP onto a Euro pallet Total 2 880 PP onto a Euro pallet The estimated cost of developing such a project is 333 500 SEK (see Table 4), excluding indirect costs such as the work time of Clas Ohlson employees, material costs for the workshops etc. This could be regarded as the investment cost of developing Toblerone from idea to concept to final prototype ready for large-scale production.

Table 4 Estimated costs for Toblerone Estimated costs Sustainability research 40 000 SEK Concept, packaging design 90 000 SEK Graphic, packaging design 24 000 SEK Prototype, packaging design 100 000 SEK Traveling costs 19 500 SEK Client workshop 10 000 SEK Internal workshop 50 000 SEK Total 333 500 SEK Assuming the freight cost for one Euro pallet of the measurements above (and under 900 kg in weight) is 2 700 SEK (Bjufors, 2014), one Euro pallet of 2 880 Toblerone PP equals 7.2 Euro pallets of the original PP, see Table 5.

Table 5 Shipping costs comparison per Euro pallet The original Toblerone Shipping 1 PP 6.75 SEK 0.94 SEK Shipping 2 880 PP 19 440 SEK 2 700 SEK (requires 7.2 Euro pallets) (requires 1 Euro pallet) In order to show this in a larger scale, the graph in Figure 20 below illustrates the break-even point of the invested 333 500 SEK at 20 Euro pallets, or 57 600 PP of Toblerone. The blue line represents the investment while the red line represents the return of investment for each Euro pallet shipped, and the numbers displayed in the graph are the number of reading glasses shipped.

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Figure 20 Break-even at 20 Euro pallets, or 57 600 items

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6. Discussion 6.1 Applicability of Sustainable Packaging Design Practices This thesis has attempted to evaluate sustainable packaging design practices and theories in an actual business environment, through a case study. The business case involved a Swedish engineering services consultant company and a Swedish retailer, redesigning the packaging of a pair of reading glasses. At the start of the thesis project, the ambitions were set quite high in regards to sustainability application. Perhaps it would be able to change the entire supply chain of Clas Ohlson, or perhaps the packaging of reading glasses wouldn’t even be necessary anymore after the thesis? However, one of the very first challenges to the project was a valuable lesson learnt. The sustainability knowledge and working methods that were taken for granted within the walls of academia, turned out to be by far too narrow and deep to apply to this business case study. The thesis therefore had to shift its focus. Instead of asking questions such as “How much environment sustainability can it achieve?” or “What is the best verification method for packaging solutions?” the questions that needed to be answered first were “How is sustainability beneficial to the overall profitability?” and “Is a thesis project like this really economically viable, isn’t sustainability just going to cost a lot of money and give nothing back?”. The lesson learnt was that economic profitability is the key, so in order to receive support for sustainability efforts there must be a strong economic case. Another lesson was that the knowledge and research in the academia are already quite extensive when compared to the general knowledge and practices in the business sector, which could be demonstrated in Figure 21. Thus finding a balance between what is applicable in theory and what is applicable in reality is vital. Figure 21 is divided into ten criteria, of which the first three are aimed for an overall corporate level and taken inspiration from Epstein’s book on the best practices of managing and measuring corporations’ social, environmental and economic impacts (2008). The following four criteria are targeting the Industrial Design team at Semcon and the Packaging and Design sub-division at Clas Ohlson, in order to give a vision of a smaller ‘eco-system’ within the bigger system. The final three criteria measure the interface between the corporation’s system and what lies beyond. These criteria are by no means any standard measurement criteria for sustainable business, but only aimed to characterize the relevant status quo experienced by the researcher when this project was first initiated, and highlight potential improvement opportunities to further integrate sustainability practices into operations and management. As an example, certifications such as ISO 14001 were not taken into account, but could have posed as an additional criterion. There is no certification specifically for sustainable packaging design; however, there is a certification to be gained from ISO, or International Standard Organization, which is a guideline for incorporating eco-design into an overall EMS. This standard is called ISO14006:2011 (ISO, 2011).

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Figure 21 Sustainability Index for Semcon and Clas Ohlson

• Corporate sustainability steering 0 Has no steering 1 Has a Quality &

Environmental Manager 2 Has a dedicated Environmental Manager 3 Has a CSO (Corporate Sustainability Officer) or equivalent, i.e. in the Board of Directors for entire company/group

• Corporate sustainability integration 0 Has none 1 Has one or a few dedicated Sustainability Coordinators 2 Has sustainability representatives in every sub-division/team 3 Uses an EMS (Environmental Management System)

• Sustainable Development training 0 Has no training 1 Has developed formal internal training 2 Every employee/new employees have had training 3 The internal training is continuously revised and enhanced

• Knowledge and application of LCA 0 Don’t know what LCA is 1 Has

scattered LCA knowledge 2 Has routine/partnership with other experts/consultant firms to perform LCA analysis 3 Has their own software and LCA expert(s)

• Sustainable design guidelines & KPI’s 0 Has no such guidelines 1 Has started developing sustainability guidelines 2 Has formal sustainability guidelines 3 Has follow-up routines for the guidelines

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• Environmental verification 0 Has no verification 1 Has optional corporate verification support function 2 Has optional local verification support function 3 Has mandatory verification process/support, local or corporate

• Sustainable design procedure development 0 Has no procedure 1 Procedure under development 2 Has a formal sustainable design procedure 3 Has continuous development of the procedure

• Involving external stakeholders 0 No involvement of external stakeholders 1

Has initiated partnerships with external stakeholders, e.g. subcontractors that can provide LCA services 2 Has formal agreements with external stakeholders 3 Can influence or act as experts to the local community

• Research of social aspects 0 Have no research 1 Have conducted one study 2 Have conducted a follow-up study 3 Have conducted multiple studies

• Research of environmental aspects 0 Have no research 1 Have conducted one study 2 Have conducted a follow-up study 3 Have conducted multiple studies

Out of the five sustainable packaging design practices and theories in 5.1 A Literature Review of Sustainable Packaging Design, three were directly applicable to the design procedure described in 5.2 Business Case Study of Sustainable Packaging Design. Those three were Sustainable Packaging Frameworks, The Holistic Approach and the Eco-cost/Value Ratio. However, the time and resources limitations to the thesis project made it only possible to apply the Sustainable Packaging Framework to the actual case study of the reading glasses. In regards to Social Aspects and Frame of Reference, those theories were also applicable to the business case, but in the context of understanding the challenges for sustainable packaging design being practiced and utilized. Nordin & Selke (2008) points out several common denominators in their analysis of the social aspects of sustainable packaging design, one of them being the lack of knowledge of sustainability concepts (for example, consumers often mistake sustainable packaging to simply be recyclable packaging). Avendaño Franco (2013) suggested that a similar challenge exists within companies and organizations in the AF&BPI, stressing that companies tended to think sustainable packaging is e.g. biodegradable packaging, rather than aiming to eliminate packaging altogether, or create a closed eco-system. This issue – approaching sustainability as only an isolated issue rather than a complex issue in relation to its surrounding systems – turned out to pose a similar challenge within this thesis project, as mentioned earlier. Avendaño Franco also brought up the conservative perceptions of packaging design (2013) – as a sort of ‘end-of-pipe solution’, a functional design or protecting device to be patched onto the product or packaging itself at the very end of the development, or as a marketing tool. A successful design is one that sells more products, rather than optimizes functionality or reduces environmental footprint. This was demonstrated during the early stages of the project when discussing how to avoid packaging altogether, if for example constructing a multifunctional display-shelf could eliminate the packaging, or it could be minimized by simply applying a coat of plastic film over the glass surface. These suggestions were however discarded by the reasoning that packaging was needed in order to protect the plastics from being chipped, and convey sales information to the consumers.

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However, the British company The Agency of Design demonstrated a controversial view of sustainable design, in their demo product ‘The Optimist’ in Figure 22. By applying an already ‘aged’ surface of the toaster, and adding a meter which shows how many times the toaster have been used, the design minimized the issue of surface imperfections and created an emotional bond between the product and its buyer, in order to make the consumer value the product more.

Figure 22 The Optimist

Source The Agency of Design, n.d. This is an interesting demonstration of rethinking the product and addressing the real issue – how can sustainable consumer behavior be promoted, environmental performance be improved, and still maintain economic sustainability? Although, the results of redesigning an entire system remain to be evaluated – The Optimist is today unfortunately not a commercial product. In regards to the packaging as a ‘sales agent’, the furniture giant IKEA has never worked with traditional packaging. IKEA is a so-called ‘branded house’, rather than a ‘house of brands’ (referring to marketing terms), which is the case of a local supermarket or kiosk selling mainly other brands than their own. This means that IKEA’s branding and sales strategy is built on promoting the entire IKEA brand, rather than individual brands competing with each other on the display shelves. IKEA has barely any products with an external brand – even their food items are branded with IKEA. Their packaging strategy is minimization, of which the entire business idea relied on disassembled furniture in flat packages, easy to transport and stock (Dahlquist, 2006).

6.2 Economic Aspects and Value Added Regarding the economic aspect of the business case study, there is clearly an economic incentive to minimizing the volume and design of the packaging – primary, secondary as well as tertiary. By taking into consideration the dimensions of a Euro pallet for

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shipping, the space could be optimized and materials reduced, which also shows potential in reducing environmental impacts from transportation and packaging material utilized. In this analysis there was a calculation for the economic aspect, but to also gain an ecological perspective, an environmental analysis such as an LCA would have been in order (see 8. Further Studies). Clearly, there should be a connection between reduced GHG (Green House Gases) because of decreased transportation and material utilization, but in order to gain a more detailed insight, a type of environmental impact analysis should be conducted (even a streamlined LCA which only takes into consideration the transportations and materials involved could be useful). However, this type of analysis did not fit into the time frame of the business case study. It is important to take into consideration that all costs associated with decreased volume were not taken into consideration. Additional costs that were not taken into consideration in this study were for example transportation costs between the origin of manufacturing and shipping port in Shanghai, the shipping port in Gothenburg and DC in Insjön, the inventory space at DC, and transportation to all of Clas Ohlson’s stores from DC. Another issue is the investment costs, since those were only an estimation of project time based on the concept generation of Industrial Design. Product (or packaging) realization is something that would have been handled by Mechanical Design and in this case it was a loosely fitted estimation. However, as the results showed, over time and depending on items sold, the investments would have been economically justified relatively quickly. Other embedded values were e.g. the knowledge added to Semcon’s design procedures. An integration of environmental aspects with the designers’ frame of references occurred after the designers had been exposed to sustainable packaging frameworks (such as SPA’s or SPC’s) through developing Toblerone. The further the knowledge base of the designers increases, the more the project lead-time will decrease – generating a leaner sustainable packaging design process. Proactively working with reducing materials and switching to more sustainable products and packaging also reduce overall risks and enhance competitiveness – e.g. staying ahead of new legal directives and requirements, reducing risks of negative media exposure due to unethical incidents, being an attractive employer etc. That adds value to company stocks, investors’ relations and potentially reduces insurance fees. In addition to economic and ecological/environmental value added, social values were limited in this business case study. It was unfortunate that stakeholders such as the supplier, a factory worker, store clerk, local community involvement/politician or consumer were not involved in the business case study, which was pointed out by several participants attending the cross-functional workshop. This is something that is aligned with the research results of Nordin & Selke (2010), which showed a lack of research in the social aspect of sustainable packaging design altogether. Social aspects of sustainability are quite broad, and from a business management point of view, it also involves adding a sense of self-fulfillment at a work place by knowing that the company values human rights, takes responsibility for their supply chain and contributes to a more sustainable community. Another aspect is the continuous

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education of the employees, which generates more skilled staff that can make an ‘internal’ career within the company, and thus lessen the overall turnover. However, there is clearly much more that can be done in this aspect, such as community involvement and/or educating consumers to recycle or reuse packaging, develop better packaging solutions etc. Would perhaps consumers like to buy reading glasses together with other products, such as books or make-up, which could reduce packaging needs? Or perhaps the packaging of the reading glasses should come with a book, in a box that can be used for storage and thus replace a secondary consumption of storage boxes? Or would the consumers rather not use reading glasses, but prefer a magnifying card in their wallet, for infrequent use? What are the environmental impacts of their choices?

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7. Conclusions A literature study has been conducted in order to gain theoretical knowledge regarding sustainable packaging design. A case study between a Swedish engineering services consultant company and a Swedish retailer have been carried out in order to exemplify and gain insight of the applicability of theoretical knowledge in an actual business case. Profitability, environmental value and other values have been presented and discussed in relation to the business case study. All of the five different practices and theories within Sustainable Packaging Design that were found in the literature study were applicable to the case study – the Sustainability Packaging Framework, The Holistic Approach and the Eco-cost/Value Ratio being directly applicable to the design procedure, while the Social Aspects and Frame of Reference were applicable in the context of understanding the challenges of practicing and utilizing sustainable packaging design. However, the application of The Holistic Approach or the Eco-cost/Value Ratio could not have been financially justified for this particular case study. However, a major conclusion drawn from this thesis project was the importance of tying sustainability efforts with economic gain and how that affects the applicability of sustainable packaging design (or even overall sustainability research). The misconception that improved environmental performance equals profit loss must be proved otherwise, before moving on to determine what kind of sustainability efforts will be taken or improved. Therefore, an assessment of the maturity of the link between environmental performance and economic performance among the stake holders needs to be made before determining the ambition level of the research topic. Digging deeper into the economic aspects of the business case study, the packaging concept ‘Toblerone’ only took up 18% of the original packaging’s volume, which resulted in a whopping 720% increase in shipping efficiency. Considering the limitations of the case study (only the shipping cost between Shanghai and Gothenburg was taken into consideration, and no other costs such as material costs, other shipping/transportation costs), the break-even of the packaging design investment is at 20 Euro pallets, or 57 600 items. Environmental values generated, such as reduced emissions from transportation and packaging materials utilized, is also most likely to be gained, but would need a more thorough investigation in order to be quantifiable. Social values such as a sense of self-fulfillment at the work place and development of skillsets could also be generated, while other values related to consumer behavior and preferences need further research.

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8. Further Studies Further studies in regards to applicability could be to conduct a similar case study, but with companies that have more developed sustainability strategy and process. By following a design procedure exemplified in Figure 23 by a hierarchical model of four steps, a design procedure can be continuously enhanced in order to design more sustainable products or packaging solutions – the four steps were created with the intention to be general rather than specific, and could therefore be used in other circumstances outside of packaging design. The practices in the Sustainable Packaging Frameworks are applicable to the first step, in order to define requirements for a more sustainable case through assumptions made. The Holistic Approach and the EVR would have been applicable in the verification step, or some other type of verification step such as a streamlined LCA.

Figure 23 The Sustainable Design Procedure Hierarchy

A streamlined LCA (only comparing the environmental impacts of transportation and material utilization) as a verification step, could have been financially justified in this case study. By using the data at hand, and then slowly increase the details and data quality of the streamlined LCA, a “good-enough” verification step could have been introduced and slowly incorporated into the design procedure, which over time would encompass a more sophisticated verification step – or perhaps even the Eco-cost/Value Ratio practice. However, this step was skipped altogether in the project because of time limitations.

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As for investigate deeper into the monetary and non-monetary benefits of the business case, the aforementioned stakeholders that were not involved in the business case study should be involved. A comparative LCA or streamlined LCA should be conducted before realizing the Toblerone packaging physically, in order to validate improved environmental impacts. Another suggestion is to investigate the possibility of eliminating the SP and TP in the business case, since it was suggested that almost 4 000 PP would fit onto a Euro pallet, including a small margin of additional packaging material. Would it be possible to construct a re-usable Euro pallet ‘box’ in order to fill it with PP directly? What are the potentials of this sort of solutions from a supplier’s perspective; would their manufacturing and logistics infrastructure support such a ‘box’ solution? Finally, in relation to sustainable packaging design theory itself, a social science study of the reading glasses and its consumers would be highly recommended. What do consumers want? For example, how can they be persuaded to change their behavior towards a more sustainable one? Would they buy a pair of ‘old’ reading glasses, without any packaging, and thus replacing the packaging ordeal with a better display shelf and a reusable container where the eyewear is simply tossed inside, with no fear of being damaged?

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9. Bibliography Avendaño Franco, A. G., 2013. The role of design practice in packaging sustainability

in Australia. Ph. D. thesis, Melbourne, RMIT University. Available at: http://researchbank.rmit.edu.au/eserv/rmit:160353/Avendano_Franco.pdf [Accessed 11 May 2014].

Bjufors, M., martin.bjufors@damco.com, 2014. Price inquiry. [email] Message to S.

Tang (stina.tang@semcon.com). Sent Tuesday 10 June 2014, 7:38 AM. Available at: https://owa.semcon.se/owa/ [Accessed 16 June 2014].

Clas Ohlson, 2014a. Purchasing and product range. (Hitting ‘Company’ and

‘Business Concepts’) [Online] Available at: http://om.clasohlson.com/en/Company/Business-concept/Purchasing-and-product-range/ [Accessed 21 April 2014].

Clas Ohlson, 2014b. Supply chain management (code of conduct). (Hitting ‘Company’

and ‘Sustainable Development’) [Online] Available at: http://om.clasohlson.com/en/Company/Sustainable-development/Supply-chain-management-code-of-conduct/ [Accessed 22 April 2014].

Clas Ohlson, 2014c. Åsa Portnoff Sundström appointed Clas Ohlson’s Head of

Sustainability. (Hitting ‘Press and ‘Press releases’) [Online] Available at: http://newsroom.clasohlson.com/en/2013/12/12/asa-portnoff-sundstrom-appointed-clas-ohlsons-head-of-sustainability/ [Accessed 22 April 2014].

Clas Ohlson, 2014d. Purchasing Department. [Internal organization chart] Clas

Ohlson AB EEA, 2012. Genertion of Packaging Waste and GDP in the EU-15. (Hitting ‘Data and

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